Keep track of your spending

Keep a little book handy and write down everything you spend, credit card, cash, cheque, debit orders, etc. and keep your budget up to date.

Credit Card and other Debt

Make a list of all your debts under the following headings:

Debts

balance in a/c

interest rate

good/bad debt

Credit Card A

Credit Card B, etc

Store/Garage Card/Gas

Mortgage/Bond

Money borrowed from friends, family, other

Student Loans

Car Loans

Hire Purchase

Unsecured Loans

Etc.

Even if you have to hunt to get all the information, do it, you will find that it is well worth the effort.

Good Debts, Bad Debts

Good debts are usually fixed term and relates to an appreciating asset, like student loans, house loans, car loans. Bad debts are e.g. credit cards and store cards. In the list above, indicate whether it is a good or a bad debt.

Reduce highest interest rates first

Check the list of bad debts for the highest interest rates and start paying them off first, pay the minimum on the others. You will see quicker results this way.

E.g. If the store cards charge higher rates than the credit cards, use your credit card to reduce the balance on the store cards. Please use your own good judgement of how much and how many to pay.

Reduce Bills

If you want to buy something, check whether it is essential or not. If you can’t afford it, don’t buy it. Rather look for cheaper alternatives if you have to have it.

Get another income

Find alternate ways to get an income by

Selling unused items

Find a second job

Get family involved in reducing spending, saving money and adding to income

….see below for some products and ideas to augment your income.

Debt consolidation

To get out of debt, you may need to consolidate your debts by taking out a loan to cover them all, and then paying off the one debt only. This would help especially of the interest rates are lower than the others. It may give you a bit of leeway to get your plan and act together. It may also get you deeper into the ‘dwang’, so be very careful with this option.

Debt Relief

If you get a bonus, tax refund, or other once-off payment, rather reduce your debts with it and/or create a cushion with an emergency fund.

Having a GOOD Plan to Get Out Of Debt will improve your health and relationships

Getting out of Debt will help

Relieve stress because you won’t have to juggle payments any more

Reduce worry and sleepless nights rolling around thinking of ways to get out of it

Improve finances

Regain control of your life

Improve family relationships because you will have some breathing space and a cushion for those unsuspected mishaps.

In a country where people don’t save, the gap gets bigger and bigger between the have’s and the have nots.

It is our responsibility to our fellow man to value, save and invest money.